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The Past 2 Months Have Been Turbulent For Banc Of California

Banc Of California's Turbulent 2 Months|NYSE:BANC

Wells Fargo said in a research note released Wednesday the past two months have been turbulent for Banc of California Inc BANC 21.23%, with shares declining 49 percent since August 22 compared to the 0.5 percent gain for the KBW Nasdaq Regional Banking Index INDEXKRX.

The firm noted a swell in short selling activity, which peaked Tuesday, hurt by poor timing and decisions. Tuesday's selloff was masterminded by rumors of CEO Steve Sugerman's purported links with securities fraudster Jason Galanis.

Wells Fargo advised taking accusations published by the individual with a grain of salt, as he has shorted the shares. According to the firm, the shares have accumulated pent up negativity over the past two months.

The firm also noted that there was a rapid rise in short interest in the shares of Banc of California following the negative publicity. The firm's estimate pitches short interest at 13 percent currently compared to 7 percent at mid-September.

As such, Wells Fargo reiterated its Outperform rating on the shares of the company.

At last check, Banc of California shares were trading at $13.63, up 21.26 percent on the day.

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